The Strategy, launched by the UN System in 2018, underscores the UN’s critical role in supporting and accelerating the mobilization of finance for sustainable development and focuses on three objectives to accelerate progress from global to local levels:
- Aligning global economic policies and financial systems with the 2030 Agenda.
- Enhancing sustainable financing strategies and investments at regional and country levels.
- Seizing the potential of financial innovations, new technologies and digitalization to provide equitable access to finance.
The Pandemic and its socio-economic impact
COVID-19 has hit hard an already weak and fragile world economy. Global growth in 2019 was already the slowest since the global financial crisis of 2008/2009. Necessary measures to contain the spread of the disease through quarantines, travel restrictions, border closures and lockdown of cities have resulted in sharp and sustained reductions in demand and supply. Economic activities in transportation, retail trade, leisure, hospitality and recreation have been battered. The supply chain disruptions halting the manufacturing industry and falling commodity prices, in particular oil, further compounded the 2 economic impact of the pandemic. The health, humanitarian and socioeconomic impacts have been devastating for many countries.
- The COVID-19 pandemic, which has claimed one million lives and resulted in more than 32 million confirmed cases, has gone beyond a health and humanitarian crisis to also become an unprecedented global development emergency.
- The pandemic is expected to drive close to 100 million to extreme poverty, the first such increase since 1998. An estimated additional 265 million people could face acute food shortages by the end of 2020. By the end of this year, 12 000 people could die from COVID-19 related hunger. The International Labour Organization estimates the equivalent of 500 million jobs have been lost so far this year. This has widened economic inequalities, disproportionately impacting developing countries and vulnerable groups.
- Even for developing countries that have not been directly affected by the virus, the COVID-19 pandemic has exacerbated the financial distress as export, tourism and remittance receipts have all dried up, threatening their ability to service existing debt payments.
- Yet, of the US $11 trillion that has been spent globally to respond to the financial impacts of the pandemic so far, 88% has been disbursed by high-income countries, compared to only 2.5% by emerging and developing economies.
- In the context of the pandemic, there was a palpable need to accelerate action related to the Secretary Generals Strategy and Roadmap on Financing the 2030 Agenda, as part of a comprehensive global response to the COVID-19 Development Emergency.
- The Initiative on Financing for Development in the Era of COVID-19 and Beyond was convened by the Prime Ministers of Canada and Jamaica and the Secretary-General. It intended to enable open and inclusive debate and proffer solutions for Heads of State and Government to consider and support. We created six informal, open-ended discussion groups with participation from governments, the UN and other international organisations, private sector, civil society and experts.
- This resulted in a comprehensive menu of options to address the current emergency, recover sustainably, and build back better by creating an inclusive and resilient future. Ministers of Finance met on 8 September – for the first time-ever at the UN – and further distilled priorities for the consideration of Heads of State and Government on 29 September.
- The UN System played a crucial role in facilitating the process. UNCTAD facilitated the group focused on producing actionable policies related to external finance, jobs, remittances, and inclusive growth; UNDP in turn supported the discussions on recovering better for sustainability; global liquidity and financial stability were addressed under the umbrella of the regional commissions, represented by ECA; DESA took a leading role in fostering debate and advancing solutions on debt vulnerability; private sector creditors engagement; and illicit financial flows.
For more information about this Initiative including the highlights so far, click here.